Dismissed

M/S Elastos Acia LLP v. Union Bank of India

Karnataka HC30 Oct 2023WP/6337/2023

Case brief

AI extract

What is this about?

This High Court dismissed a writ petition filed to quash a sale and possession notice issued by a bank. The court held that the petitioner's non-compliance with a prior interim order regarding loan repayment demonstrated a lack of bonafides, rendering the petition liable to dismissal.

What did the court decide?

The writ petition was dismissed. No order as to costs. Pending I.A.s disposed of.

M/S Elastos Acia LLP Vs Union Bank of India — Banking and Recovery | Karnataka HC (2023)

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NC: 2023:KHC:38244 WP No. 6337 of 2023

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 30^TH DAY OF OCTOBER, 2023

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BEFORE

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THE HON'BLE MR JUSTICE K V ARAVIND

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WRIT PETITION NO.6337 OF 2023 (GM-RES)

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BETWEEN:

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Digitally signed by DHARMALINGAM Location: HIGH COURT OF KARNATAKA

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M/S ELASTOS ACIA LLP O/AT DOOR NO. 715, CLASSIC SAPHHIRE, SHAKTHI NAGAR, MANGALURU, UNIT BLOCK, NO.G6, EPIP, (EXPORT PROMOTION INDUSTRIAL PARK), GANJIMUTT MANGALORE, DAKSHINA KANNADA DISTRICT-574 145. REP BY PARTNER. MR S RADHAKRISHNA BHANDARY, S/O RADHAKRISHNA KOTEKAR BHANDARY, AGED ABOUT 42 YEARS, (REGISTERED UNDER THE PROVISIONS OF LLP ACT). …PETITIONER (BY SRI RAJASHEKAR.S, ADVOCATE) AND: UNION BANK OF INDIA NO.44/1/128, 1ST FLOOR, DEENAR MANSION, BALMATTA ROAD, MANGALORE, DAKSHINA KANNADA DISTRICT-575 001, REP BY ITS AUTHORIZED OFFICER/ MANAGER. …RESPONDENT (BY SRI. MONESH KUMAR K B., ADVOCATE)

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NC: 2023:KHC:38244 WP No. 6337 of 2023

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THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE SALE NOTICE DATED 21.02.2023 AND THE POSSESSION NOTICE DATED 22.11.2022 ISSUED BY THE RESPONDENT VIDE ANNEXURE-A AND ETC.

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THIS PETITION COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP THIS DAY, THE COURT MADE THE FOLLOWING:

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ORDER

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The petitioner is challenging the sale notice dated 21.02.2023 and possession notice dated 22.11.2022 issued by the respondent vide Annexures-A and B. The partners of petitioner firm were employed in multinational companies, planned to start an industry during 2015 under the newly introduced ‘Startup India Scheme’. As a result of the said proposal they had identified Heat Resistant Natural Lotex Industry and they had initiated the process of establishing the same. It is further submitted that they had incorporated Limited Liability Partnership Firm in the name and style Elastos Acia LLP and same was recognized by the Department of Industrial Policy and Promotion.

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NC: 2023:KHC:38244 WP No. 6337 of 2023

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The petitioner applied for allotment of land at

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Single Window Committee at District Industries Centre, Yeyyadi, Mangaluru, which was allotted for the proposed startup. During March, 2018, Karnataka Industrial Area Development Board issued possession certificate and executed Lease cum Sale Agreement dated 10.04.2018 and thereby leased the industrial area in favour of the petitioner.

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The petitioner availed startup loan to the extent of Rs.3,15,00,000/-, out of which Rs.2,85,00,000/- was under the term loan facility and Rs.30,00,000/- was Cash Credit Facility from the respondent bank by executing necessary loan documents to set up a startup industry as per Startup India Scheme. After availing the loan, the petitioner has paid the substantial amount towards the loan account. However due to unavoidable circumstances and severe financial problem faced by the petitioner, remaining loan amount could not be repaid.

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4 - NC: 2023:KHC:38244 WP No. 6337 of 2023

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The respondent bank issued demand notice

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dated 22.11.2022 calling upon the petitioner to remit the entire outstanding of loan amount of Rs.5,73,74,971.52/or to handover possession of the schedule property. The petitioner made a representation dated 24.11.2022 to the respondent bank seeking time to repay the outstanding loan amount. The respondent bank instructed the petitioner to submit a letter explaining the repayment schedule. The petitioner submitted a detailed letter dated 27.01.2023, pointing out the manner in which the repayments would be made. The petitioner has failed to comply with the repayment schedule provided by the respondent bank. Hence the respondent bank proceeded to issue sale notice dated 21.02.2023 and notifying the properties for auction to be held on 28.03.2023 between 11.00 a.m. to 4.00 p.m.

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5. The co-ordinate bench of this Court by order

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dated 27.03.2023 has granted interim order protecting the interest of the petitioner by permitting the respondent to

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5 - NC: 2023:KHC:38244 WP No. 6337 of 2023

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proceed with auction, however direction was issued not to confirm the sale or issue sale certificate to the auction purchaser subject to the petitioner depositing 20% of the outstanding amount within eight weeks in two installments i.e., 10% within four weeks from 27.03.2023 and remaining 10% within four weeks thereafter. The above interim order dated 27.03.2023 was not complied with. However, by order dated 20.04.2023 this court made it clear that interim order would continue only if payment in terms of the interim order dated 27.03.2023 is made.

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Even today, it is not placed on record any evidence regarding compliance of the order dated 27.03.2023.

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Heard the learned counsels appearing for the petitioner and the respondents.

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The non compliance of the interim order dated

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27.03.2023 would show that petitioner has no bonafides to

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persue this writ petition. In the circumstances nothing

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NC: 2023:KHC:38244 WP No. 6337 of 2023

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survives in this matter for further consideration. Hence, the writ petition deserves to be dismissed.

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Accordingly, the writ petition is dismissed.

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No order as to costs.

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Pending I.A.s, if any, stand disposed of.

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Sd/JUDGE

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KLY CT: JL

M/S Elastos Acia LLP v. Union Bank of India

Case brief

What is this about?

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M/S Elastos Acia LLP v. Union Bank of India

Case brief

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